Fact from Hype

The financial industry is never short on rumor and rhetoric, but with the Fed’s announcement today animating the market and buzz increasing about Bernanke’s successor, media outlets have gone into a full-on feeding frenzy. We’re going to skip the bull and provide some facts. Included here are two very telling graphs on interest rates. The first shows recent activity in the 10-year US Treasury from Jan 2013 through August 2013. The second graphic takes a broader view of multiple rate indexes and dates us back from 1985 to today.

Let’s take a look at the big picture—no wild predictions, just perspective. Rates are higher than they were a few months ago, but still remain at some of the lowest levels we’ve seen over the past 30 years. The takeaway—the most significant benefit offered by the current landscape is the ability to take long term financing risk out of the investment equation.